NatWest Group Pension Fund (formerly Royal Bank of Scotland Group Pension Fund) (CAS-102084-N1D3)

Ombudsman’s Determination

Outcome

The complaint should not be upheld because the Trustee is required to pay the pension increases specified in the Fund’s governing documentation (such increases being capped at 3%, subject to any overriding statutory underpin) and in accordance with pensions legislation. Furthermore, I have found no evidence of a direct link between the introduction of the cap on pensionable salary and any promise to pay pension increases capped at 5%.

Complaint summary 

1. Mr N has complained that, in April 2022, the annual increase to his pension was capped at 3%, when the Fund had previously provided for annual increases of the lower of 5% and the increase in the Retail Prices Index (RPI).

2. He says the higher 5% cap was confirmed in a communication introducing a separate pensionable earnings limitation, acceptance of which was a condition of getting that year’s salary increase. The communication explained there might be a contradiction with the pension scheme rules, which it might not be possible to amend. However, the communication was said to take precedence, and that accepting the salary increase would override the rules.

3. He says he subsequently became aware from other pensioners that a decision had been taken to revert to the previous cap of 3% and, when he checked his pension statement, he found that this was the case. Mr N says the 5% cap was one of the terms of the pensionable salary limitation agreement.

4. As a result, Mr N has requested that either:

   1. the 5% cap be re-instated; or

   2. the cap on pensionable salary be removed, resulting in the re-calculation of his pension and the payment of the revised pension backdated to when it commenced in 2011.